The loss after financial items was SEK3.97bn (£340m) and post-tax losses were SEK3.06bn (£260m).
H&M Group said it has taken “rapid and forceful action” across all parts of the business, including product purchasing, investments, rents, staffing and financing, to manage the impact of the pandemic.
Helena Helmersson, H&M Group CEO, said: “At most around 80% of our stores were closed in the second quarter and in those markets where stores were open, demand was significantly subdued. Although we took rapid and decisive action, which reduced our costs considerably, it was impossible to compensate for the 50% drop in revenue and, as we had previously communicated, the quarter was loss-making.
“During the pandemic it became clear how important it is that the digital and physical channels interact to meet customers’ needs. When the majority of the stores were temporarily closed in the second quarter, we focused on redirecting product flow to our digital channels, which remained open at all times in nearly all our online markets.
“Online sales increased by 36% in SEK during the quarter. The positive development of online sales has continued since we began reopening our stores. As the stores have reopened, our total sales have gradually begun to recover. Our pace of recovery varies greatly between markets – partly because local restrictions differ, but has so far been better than expected.
“Rapid adjustments to product purchasing and buying plans meant that the stock in trade was able to be reduced somewhat in the second quarter compared with the previous year. However, since there is an oversupply of spring products throughout the industry, and the market remains weakened, we expect markdowns in relation to sales to increase again in the third quarter.”